Food Fight! Food Lion And Farm Fresh Take Aim With Prices, Ads

September 03, 1989|By NEIL CORNISH Staff Writer

The friendly neighborhood grocery stores aren't as friendly today as they used to be - to each other.

Food Lion's strategy of advertising price comparisons between itself and its competitors has drawn a response from Tidewater market leader Farm Fresh. For the past few weeks, Farm Fresh has run newspaper ads comparing the cost of identical grocery lists from the two stores that show Farm Fresh the winner.

Michael Julian, Farm Fresh chief executive, said the ads were an attempt to clarify what he called Food Lion's "misleading advertising."

"When people come after us, we will vigorously defend ourselves," Julian said. "We just can't allow comments like that where someone attacks us to go unanswered."

Until recently, Norfolk-based Farm Fresh could easily have chosen not to respond to Food Lion's claims. While Farm Fresh stores maintain a commanding 42-percent share of the grocery market in Hampton Roads, Salisbury, N.C.-based Food Lion has grown from six stores and 4.6 percent share of the area grocery business in 1981 to being second to Farm Fresh with a 25-percent share this year, according to Food World maga zine.

Susan Mayo, Farm Fresh vice president of consumer affairs and public relations, said her company's ads were a response to Food Lion's price comparisons based on individual categories of food. Food Lion has run similar comparisons against other competitors, including Gene Walters Market Place in Southside Hampton Roads and Kroger's in Southwestern Virginia.

Mayo said the category price comparisons did not give an accurate picture to shoppers, who do not buy just one category of goods. Farm Fresh's response is "really just to educate the consumer," she said.

In addition to using newspapers, Farm Fresh has set up two filled shopping carts at the entrances of its stores with a display of the price comparison. Farm Fresh's comparison listed a variety of food, including potato chips, hot dogs, rice and produce.

Food Lion spokesman Michael Mozingo defended the category comparisons, saying they take into account differences in brands and sizes. While he conceded that no one would buy an entire product category to save money, he said the ads give consumers a better overall price picture of what they can expect when they enter a store.

One of Farm Fresh's ads stressed the differences in items carried by each store. It said the company's computer "laughed" when officials asked for a price comparison, noting Farm Fresh caried 36,000 items while Food Lion carried only 12,000.

Mozingo countered, saying the company will stick to its low-cost, no-frills policy. "We've concentrated on groceries so we can provide groceries at the lowest possible price," he said. "You can get a very good selection of food at a Food Lion store."

Although he said he had not seen the recent Farm Fresh ads, Mozingo said from his office in Salisbury that the ads are not the first time competitors have attacked Food Lion's price-com parison strategy. "We're normally recognized as the low-price leader in a market," he said.

Neither Julian or Mozingo predicted the sparring bouts would yield a price war in Hampton Roads. For his part, Julian downplayed the significance of Farm Fresh's recent actions.

"We'd rather let people shop and make their own price comparisons," he said. "I don't think you'll see Food Lion or Farm Fresh changing their prices."

Mozingo said the competition does not play a part in how Food Lion sets its prices. He said the company will continue to run price comparisons looking at categories in spite of the recent rebuttal.

"Maybe they see us encroaching on their turf or taking market share away from them," Mozingo said.

Farm Fresh, which also operates under the various banners of Nick's, Food Carnival, and The Grocery Store, has 63 stores in Virginia and North Carolina. Food Lion has more than 600 stores in eight states, with 150 in Virginia.

Spokesmen for both chains did agree on one point: The best way for shoppers to find out which store offers the best prices is to shop them themselves. "Anybody can pick a group of items and say they're cheaper," Julian said.